One of the biggest, more-or-less pure-play silver miners entered 2021 with the wind at its back. Pandemic-related money creation was starting to generate inflation, which is great for inflation hedges like silver. The company had a new, potentially big and profitable gold mine starting up in Nevada, and the most likely scenario had rising production and high silver/gold prices generating solid cash flow for years to come. Its share price reflected this optimism.
Then the new mine turned out to be a dud, with low grades and higher-than-expected costs. And in 2023, the company closed the mine and took a massive write-off. Its stock cratered and has been languishing at about a third of its 2021 peak as its former fans wander off to greener pastures.
But suddenly, good news is pouring in. Production is up, costs are down, and drilling is finding new deposits. The stock is beginning to stir, making this a reasonable time to add it to our Portfolio.